Rep. Warren Davidson (R-OH) is pressing Congress to use the upcoming National Defense Authorization Act (NDAA) to permanently scrap the Corporate Transparency Act (CTA), a law he argues unfairly targets small businesses with onerous reporting mandates.
In an op-ed, Davidson, a member of the House Financial Services Committee, criticized the CTA as another Washington misnomer—similar to the Inflation Reduction Act or the Patriot Act—that sounds benign but imposes heavy federal oversight. The law, enacted under the Biden administration, requires millions of small businesses and entities, including homeowners associations and one-person shops, to disclose personal information to the Financial Crimes Enforcement Network (FinCEN). Large corporations are exempt, leaving the compliance burden on the smallest operators.
Davidson pointed to the law's poor track record: FinCEN receives millions of reports annually, yet law enforcement reviews only a tiny fraction, and less than 1% of laundered money is ever intercepted. He argued that the CTA treats innocent business owners as potential criminals without any evidence of wrongdoing.
The Trump administration's Treasury Department has already taken steps to ease the reporting requirements, but Davidson stressed that only Congress can repeal the law. He highlighted his Repealing Big Brother Overreach Act, which has 193 co-sponsors and the backing of the National Federation of Independent Business. Though the bill was not included in the House NDAA process, Davidson urged its inclusion in the final version, noting that the CTA was originally attached to an NDAA under Democratic control.
Davidson concluded that small-business owners should be free to focus on their work without fearing future administrations reviving the reporting regime. He called on Congress to make the current relief permanent by repealing the CTA.
This push comes amid broader scrutiny of the CTA's implementation. Critics have slammed the Treasury's recent beneficial ownership exemption as insufficient, while others have raised concerns about the law's impact on business owners. The debate underscores the ongoing tension between regulatory oversight and small-business freedom.
